Which of the Following Statements Is Most Correct

question 17

Multiple Choice

Which of the following statements is most correct?

• A) One advantage of stock repurchases is that they are generally taxed more favorably than dividend payments.
• B) One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive.
• C) Stock repurchases make sense if a company is interested in increasing its equity ratio.
• D) Stock repurchases make sense if a company believes that its stock is overvalued and that it has a lot of profitable projects to fund over the next year.
• E) One advantage of an open market dividend reinvestment plan is that it increases the number of shares the company has outstanding.

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Definitions:

Working Smarter

A strategy that focuses on achieving greater outcomes or productivity through efficient methods, often by prioritizing, leveraging tools, or streamlining processes.

Duplicate Work

Performing the same task or creating the same product multiple times, often unnecessarily, leading to inefficiency.

Outsmart

To defeat or gain an advantage over someone through greater intelligence, cleverness, or cunning.

Tech Savvy

The ability to easily understand and utilize technological tools and innovations.